On 11th January, Reuters reported that the Baltic Exchange is looking forward to launch a freight index for liquefied natural gas (LNG). In the near future they are planning to team up with leading ship brokers so that they can explore potential shipping routes for the LNG market, said the company on Thursday.

The Baltic Exchange is a forum for chartering vessels which came into existence in 1744. Since then it’s influence has increased and now it produces benchmark indexes for global shipping rates, including ones used by the multi-billion dollar freight derivatives market. Run by the Singapore Exchange since its transfer of power in 2016, the Baltic Exchange publishes the Baltic Dry Index, which is the most widely known freight benchmark, that tracks rates for ships transporting dry bulk commodities including iron ore and coal.

“The growth in LNG transported by sea has led to the formation of a spot market,”Baltic Exchange Chief Executive Mark Jackson said in the statement. The London-run business will work with ship brokers Affinity, Braemar ACM, Clarksons and SSY to assess a variety of potential routes prior moving to the trial phase.

“However, any spot market needs to be underpinned by standard contractual terms – as already happens in the tanker and dry bulk freight markets. The Baltic Exchange is looking to support the LNG freight market as it matures and we hope to deliver greater transparency through an index”, Jackson added.